A Delaware court has rejected real estate giant Realogy’s bid to compel Madison Dearborn Partners (MDP) and SIRVA Worldwide to close a $400 million deal to purchase the relocation arm of Realogy subsidiary Cartus. Realogy had accused MDP and SIRVA of using the global coronavirus pandemic to avoid closing the deal.
After a hearing held over Zoom on July 17, the judge for the case, Vice Chancellor Morgan Zurn, granted the defendants’ motion to dismiss Realogy’s claims attempting to force them to go through with the deal. The court dismissed those claims with prejudice, meaning they have been dismissed permanently.
However, Realogy’s claims for a $30 million termination fee will go forward. The case is set for a Nov. 30 trial date, according to Realogy.
Zurn found that the acquisition failed because Realogy’s lawsuit against SIRVA’s private equity owner, MDP, violated the purchase agreement, according to Bloomberg.
“Realogy, not SIRVA, caused the conditions to fail,” Zurn said, according to the news outlet. Zurn has not issued a written order and it’s unclear if she ultimately will.
In an emailed statement, a spokesperson for Realogy said, “While we are disappointed the court dismissed the specific performance remedy, we look forward to pursuing our case for the breakup fee.”
The company also made clear that it intends to continue to support Cartus now that it will no longer be acquired.
“For more than 20 years, Cartus has been an important part of Realogy and as the market leader in global relocation, serves as a strong lead generator for our affiliated agents and franchisees and an economic contributor to our business. We will continue to build on and invest in Cartus’s success, including new technology and product offerings, new and expanded client relationships, and exceptional service levels for mobility clients worldwide,” Realogy said.
In a statement, SIRVA said it was pleased with the court’s ruling.
“As the Court concluded, Realogy — not SIRVA — caused the transaction to fail and nothing about SIRVA’s business or financial position factored into the Court’s determination that the transaction would not proceed,” the company said.
“Moving forward, SIRVA remains financially strong and well positioned to continue serving our clients with best in class service and support through our leading array of capabilities, technologies and services as they navigate the challenging global market environment, and we will continue to vigorously defend ourselves and assert our rights in any further litigation with Realogy.”
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